We teach our children key lessons to prepare them for life.So, recently, Ron explained to daughter Karyn another episode of: How the World Works.Long ago, in addition to his full-time job, Ron took on part-time gigs as an expert witness in utility regulation for public-interest, consumer, environmental and senior-citizen groups.He testified on nuclear power economics, rate setting, alternative energy, etc.All these subjects had in common that in each case he needed to create one or more large spreadsheets with, typically, 15 columns and 35 rows of numbers.Each spreadsheet started with a number in the upper left corner that Ron provided.Then, other cells were filled in using formulas to compute the entries down each column.Today, of course, many people use personal computer programs to do such work.But since Ron was born shortly after the fall of Rome, computer spreadsheets had not yet been invented.Instead, he employed part-time assistants for this work.He specified the formulas for each column, and he provided the assistants hand calculators (then the latest technology) to do the computations plus large sheets of ledger paper on which to record the results.Each calculation depended on the calculations made before it and each number had to be exactly correct, or the mistakes would undermine the clients’ case by leading to erroneous or unsupported conclusions.So, this was a challenge.Ron solved it by having two people start at the same time to create separate copies of each spreadsheet and then stopping every ten minutes to check their results against the other’s.If the numbers matched, they pressed forward.If not, they checked each cell until they found where their numbers first differed.Then they decided which of the two numbers was right, corrected the other sheet, and continued on for another ten minutes to another check.As you can imagine, this procedure took a lot of the assistants’ time and Ron’s.So, even at the very low public-interest rates he charged the clients, it was expensive.Then, of course, the more than 500 numbers had to be typed (no word processing in those days) onto an exhibit to be attached to his testimony, with each typed number checked for accuracy.These spreadsheets that provided key results to support his analyses and recommendations always depended on a number of assumptions and input values.Any analyst would want to create a number of such spreadsheets to test the effects of different input values and assumptions on the conclusions and recommendations.But the time and cost of each spreadsheet rendered that impossible for him.The wealthy parties on the other side of the case, of course, had mainframe computers.So, they could not only check the one or two cases Ron ran but also the many he wanted to run but couldn’t.This gave the other side an advantage in cross-examining him and in making their case.Then somebody invented the personal-computer spreadsheet, allowing people to do the first case quickly and accurately and then to test even more quickly as many sensitivity cases as desired.This was democratizing: It gave the little folks a fighting chance against the large powerful interests, saved many dollars in the cost of mounting a case, and improved the product.Moreover, millions of people and businesses used spreadsheets for many other purposes.So, multiply similar individual item savings by many millions of customers and many spreadsheets daily for each customer -- and it’s clear that those who invented and improved spreadsheets saved people and businesses many billions of dollars.Here’s the lesson: Those spreadsheet developers got rich by delivering great value to many people and sharing via their product sales in the huge total value they delivered to others.Capitalism is a positive-sum game.That is, in a market economy, people accumulate income and wealth by delivering value to others.Contrary to progressives and statist liberals, successful capitalists don’t become wealthy by preying upon the poor and others.Socialism, government, redistribution and other coercive collectivist systems involve predatory behavior.So, mostly, a person’s wealth in a market system reflects the good s/he has done for others, not the extent to which s/he has exploited them.

Each year as spring arrives, we watch life renew itself and are reminded of the path of history, the evolution of mankind and our role in the universe.For we two baseball fans, spring is a special treat.All our lives, spring marked annually the rebirth baseball’s greatest left-hander, Vin Scully.Last year served his 67th and final year as the voice of our favorite team, the Brooklyn/Los Angeles Dodgers.This new season without the calming cadence of our hero of the airwaves, the debut of his successor reminds us of the infinite procession of human talent playing across the world stage. Vin Scully will no longer narrate Dodger games, but 28-year-old Joe Davis will have the opportunity to begin a new legacy in his place.This causes us to consider the various rites of passage we all undertake, each person adding a new facet to the human legacy.So, we recall our earliest professional endeavors and how we admired those who came before us.We each cut our teeth three decades apart, but we both recognized greatness in our fields and sought to learn from and emulate those we admired.While we’ve had the good fortune to meet and interact directly with many great and insightful economists during our careers, we’ve also engrossed ourselves in the written wisdom of those who passed before us.We hope our work and that of our many contemporaries continues to renew the legacies of great thinkers like Milton Friedman, Friedrich Hayek, Ronald Coase and others.Recently, we memorialized the career end of a living legend, Thomas Sowell.We are honored to have stood on the shoulders of these and other giants, and we hope our modest contributions are worthy of their great ones.So it is in every field of human endeavor.We all have our time in the sun, but none of us could accomplish much without the accumulated contributions of those who came before us.Some are more innovative and productive than others, of course, which is why we seek to emulate those who have made the greatest contributions.Over time, the accumulation of knowledge by human beings, the specialization it enables, followed by rounds of innovation and emulation by up-and-comers – all that lays the intellectual foundation for human progress.Economists typically speak of human progress in terms of material wellbeing, but we like to emphasize the broader notion of human flourishing.All forms of progress rely on the evolution of ideas and the ability of human beings to pass the torch from one generation to the next.Geoff reflected on these things earlier this week while watching his young kids play on the first shoots of green grass behind their house.As Carson and Sage grow into adulthood, he wondered who they would one day admire and seek to emulate.What contributions will they make, and will they one day become major contributors in their fields, imparting their wisdom and creativity to succeeding generations?Ron’s daughter Karyn is beginning to flower from teenager into a stunning young lady.Her interests differ from his, but she’s beginning to show great creativity, initiative and follow-through in addition to the sweetness, character and great sense of humor she has always exhibited.As Ron witnesses the spring-time of her life, he feels truly blessed.Ronald Reagan noted: “Freedom is never more than one generation away from extinction.”If the values of individual liberty and free enterprise and the hope, happiness and prosperity they engender are not sufficiently expounded by one generation and transmitted to the next, they could give way to a long dark age.For over two centuries, America’s institutions and practices have yielded continually expanding horizons and made us the healthiest, wealthiest generation in all human history.We owe it to our children and all future generations to continue that legacy.That’s why we do all we can to preserve those institutions and practices.And when our moment is over, we hope there will be others to whom we may pass the baton, like Vin Scully to Joe Davis.As we celebrate spring and renewal, we note a few reasons our efforts are important.Their names are Karyn, Carson and Sage.

This is the final column in a series presenting findings and conclusions of Nevada’s 2016 Popular Annual Financial Report (PAFR), posted at controller.nv.gov.Here, we present policy recommendations based on our analysis of issues in the PAFR.The PAFR shows that, economically, Nevada families and businesses have fared poorly the last decade, but the burden on them of state spending and revenues has continued to rise.Spending increases were driven by the two largest sectors, health and social services and K-12 education.But the increased spending did not improve the poor results those sectors deliver in Nevada.We also showed that state and local employee pensions constitute a major risk and burden, mainly because their board relies on unrealistic estimates of future returns on their investments.We showed that the prospects for economic growth, and also for returns on pension and higher education endowments, are poor for the foreseeable future.The main reason is government excess in spending, taxing, regulation and other intervention, exacerbated by demographic and labor-force participation trends, excess debt levels, and adverse trends in trade and growth of other economies.We also reviewed the decline in entrepreneurship in Nevada.What to do?First, we must rein in state spending and regulation by growing government slower than the economy and the incomes of our families and businesses for the foreseeable future.This will be quite challenging with very slow economic growth and low investment returns.Nevada foolishly embraced Obamacare, but now the federal government is reducing its Medicaid subsidies on which the state has become dependent.So, we must now reduce health-care coverage and spending, especially for able-bodied folks with incomes above poverty levels.And we must focus health-care spending on a pool of high-risk persons instead of using third-party payment for a massive mess of cross-subsidies masquerading as insurance.We must allocate K-12 spending toward programs that have been demonstrated to improve student achievement, not toward pacifying the teacher unions and education bureaucracies.Funding should follow the students and favor wide-scope educational choice by their families.And Nevada needs to embrace much more technological innovation in all levels of educationNevada, like much of the country, has increased higher education’s administrative burden, and those salaries have continued to grow in real terms.We must curtail those trends and move resources into actual education.We need also to redirect some resources from the two universities to the community colleges to redress long accumulating inequities between them.Nevada public pensions and education endowments should adopt a reasonable expected annual rate of return on their investment portfolios of five percent.The pension system needs also to revise its demographic assumptions to reflect longer working and retirement lives.We must also revitalize the dynamism of our economy and promote genuine entrepreneurship as the path to sustained growth and economic development and end crony and corporatist special deals.Occupational and other licensing laws that are here more onerous than in other states must be repealed.This includes especially dubious licensing schemes for occupations like interior design and music therapy that exist in only a handful of states.Nevada’s approach to economic development has focused on providing incentives to select private firms with political influence.Substantial packages of targeted tax incentives have been awarded or offered recently to Amazon, Tesla Motors, Faraday Future and the Oakland Raiders.Such special deals must not be repeated in the future.Likewise, we must abjure legislation crafted in recent years to authorize outright cash grants of state funds to private firms, preferential “economic development” utility rates and transferable tax credits that can be sold for cash on secondary markets. All these interventions distort natural market incentives for innovative and productive behavior.For more than two centuries America and the West have prospered by embracing the rule of law, limited government with enumerated powers, separation of powers, personal liberty, individual rights, strong property rights and high levels of economic freedom.This legacy provided hope, growth, opportunity and fairness to us, but our failure to rigorously uphold it means we are in danger of leaving Nevada’s children and grandchildren a grim future instead. We must turn things around to leave future generations the same legacy we inherited.

Our Founders and the classical liberal intellectuals they followed got the basics of government right and thus launched two centuries of freedom and opportunity leading to hope, unprecedented economic growth and astounding human flourishing and well being.However, a century later a counter movement arose and has continued to gain until now, undermining freedom and opportunity and diminishing hope, growth, well being and flourishing.That counter-movement was progressivism.It has assumed other names such as: modern liberalism (as distinguished from classical liberalism), third way and political correctness.Early European proponents said fascism.Recently, all these statist populist factions seem to have returned to the label of progressivism, so we’ll use that brand to encompass them all.The Founders, led by Washington, Adams, Franklin, Jefferson and Madison – who were enlightened by men such as John Locke and Adam Smith – left us a legacy of six parts.They are: the rule of law; limited government with separation of powers; personal liberty; individual rights; strong property rights; and high levels of economic freedom.These elements greatly changed the course of history, replacing a world of little opportunity, fatalism and extremely slow economic growth with remarkable human flourishing, hope and growth.Before these classical liberal ideas took root, a person’s lot in life was almost always roughly the same as that of his parents.Social and economic mobility was essentially unknown, as was economic growth.President Lincoln, the founder of the Republican Party, led us in forging a permanence to the Founders’ legacy.However, after him, the original progressive movement developed in Britain, Germany and Italy before being exported to America.Here it was taken up first by Republican Teddy Roosevelt.Thereafter, it was embraced and led mainly by Democrats, including Wilson, Franklin Roosevelt, Lyndon Johnson, Carter, the Clintons and ultimately Obama.In the 20th and 21st Centuries, only Presidents Reagan and Coolidge stood strong against progressivism.Progressives disdain the rule of law, preferring instead the so-called living constitution, which guts the words of our founding documents by declaring they mean whatever is convenient at the time.Progressives basically idolize government and abhor its constraints, which is why they’ve had no complaint about presidents who rule by executive decree.The progressive alternative to limited government with separation of powers is the modern administrative state.Not only has it slowed economic growth to a crawl that looks likely to persist indefinitely, but it has also become the most oppressive force people face today, from the local zoning board to the IRS, BLM and EPA.Progressives view personal liberty as a quaint idea that often gets in the way of central planning and control by our enlightened betters – that is, the progressives themselves.All history has shown that people pursuing their own interests in a market context do great and wonderful things to the benefit of other folks and society as a whole.Personal liberty does the job, but statism in all its forms fails.The progressive alternative to individual rights is group rights.By their nature, individual rights belong to everyone and thus are fair and socially constructive.By contrast, group rights are not rights at all and not fair because they apply only to members of favored political client groups.In short, they’re wrongs.The progressive alternative to strong property rights has mainly been redistribution.Strong property rights operating in market systems are fair because they let folks retain the fruits of their creative and productive activities, thus rewarding people for socially productive behaviors.So, they foster cooperative behavior throughout the society.The progressives’ arrogant and destructive desire to level everything leaves everyone but insiders roughly equally poor and oppressed.That’s what Friedrich Hayek, who saw the progressive vision unfold in Germany, warned about in “The Road to Serfdom.”Since FDR, progressives have stifled economic freedom with the metastasizing administrative state, excess government spending, taxes, debt and other intervention.Another favored and resurgent tool is economic nationalism and protectionism.This and the other five progressive hobby-horses increasingly have slowed growth of the economy and thus also human wellbeing and flourishing.The fateful battle pitting progressivism versus the Founders’ legacy of freedom, hope, growth, opportunity and human wellbeing will be decided in the coming few years.